HAGERSTOWN, Md. — Hagerstown officials began discussions about the city’s 2028 budget earlier than usual. City leaders say they are facing a long-term budget deficit because operating costs are rising while revenue growth remains slow.
During the July 21 work session, City Administrator Scott Nicewarner gave an overview of the city’s finances. He said the goal was to get both officials and the public ready for budget talks before the official process begins next spring.
In April, Nicewarner told the council he planned to start budget talks earlier than usual. He said this would help the administration and council better match their budget plans with the city’s priorities, rather than waiting until the budget was nearly finished.
Nicewarner said Hagerstown will likely continue to face a budget deficit “for the foreseeable future.” He explained that the city often starts its budget planning with expenses higher than its revenues. He also clarified that this deficit differs from a temporary shortfall, since it ends only if spending, revenues, or both, change significantly.
The presentation lists several reasons for the city’s financial troubles. These include rising wages, higher costs for employee health insurance, pensions and other benefits. Public safety expenses are also going up. Inflation is making fuel, utilities, equipment and construction more expensive, and maintaining existing infrastructure is also more costly.
Nicewarner also mentioned broader structural issues affecting the city’s finances.
He explained that many properties in the city, like churches, nonprofits and government buildings, are tax-exempt. This reduces the total value of taxable property. He also noted that some older neighborhoods have seen slower growth in property values, and new development is happening outside city limits. Residents there may use city services, but their tax revenue does not go into Hagerstown’s budget.
Nicewarner said the city serves as the county’s urban center. Many people who live outside the city still use public safety, transportation and infrastructure services, but they do not pay city property taxes. He called this situation “a regional service footprint with a local funding base.”
The presentation also reviewed public safety costs, which are among the city’s largest expenses.
While personnel costs continue to rise, Nicewarner said recruitment efforts have greatly reduced police staffing vacancies. The department has reduced patrol vacancies from about 25–30 to around five, and additional scheduling changes should help with hiring and retaining staff. Still, police, fire, and emergency medical services require significant operating and capital investment.
Infrastructure was another major topic in the presentation.
Nicewarner said the city’s aging water and sewer systems, streets and other facilities need more maintenance, repairs and replacement. However, state and federal funding is still limited. He warned that delaying maintenance will put more strain on the budget and could worsen the city’s long-term financial problems.
The presentation also noted that economic development patterns affect the city’s future revenue.
Officials said much of the county’s recent growth has happened in residential and logistics areas outside the city. These developments increase demand for services but usually generate less tax revenue per acre than traditional downtown commercial development.
Nicewarner stressed that starting the budget discussion early was meant to ensure transparency and help residents understand the city’s financial situation before any decisions are made.
He said future budget talks will focus on balancing service levels with available revenue, while continuing to invest in public safety, infrastructure and other key city services. Formal discussions about the 2028 budget will continue in the coming months before the plan goes to the mayor and council for review in 2027.
